From Morningstar:

David Einhorn, hedge fund investor, states passive investing has broken markets. Passive managers have no opinion on value, only price. Einhorn adapted investment style to account for passive investing’s growth, returned to beating benchmarks. Passive funds are gaining in the US and UK, outperforming active funds consistently. Institutionalization of markets has resulted in passive and active funds buying into the same stocks. Academic studies support Einhorn’s claims that passive investing distorts markets, affects stock performance.



Read more at Morningstar: Passive Investing = Broken Markets. Discuss.